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Hi Taylor
- I'm in my mid-50s and am about to retire. I have a good amount of
money saved up and feel comfortable leaving work, but I'm wondering
if you have any advice for handling my finances once I'm done working.
- Bradley
Hi Bradley - Does it feel great? I've got a lot of working
years ahead of me, but I imagine it must feel oh so sweet to step
out of the workplace a few years earlier than your friends. Congratulations!
To your question, you have to tighten things up when you first step
into retirement. That's not to say you have to become painfully frugal,
but you need to get conservative in some areas while still allowing
money room to breath in other ways. For you, patience will be important
as you wait for social security and IRA distributions. Nothing wrong
with retiring before those payments kick in, but you have to have
a solid spending plan since your own funds will be responsible for
covering all your bills.
Start by making sure you don't have money in risky markets. Certain
tech and energy sectors have lots of appeal but too much risk for
a person who needs to start living off their investment money. Some
people seem to think retirees have to pull everything out of the stock
market, but I don't agree with that philosophy. Reconfigure your portfolio
and cut back on the more volatile positions, but don't be afraid to
leave money in there to work. I am a huge fan of high quality (blue-chip
type) dividend-paying stocks so if you have some of those, I'd hold
onto them.
If you have the money, time and energy, I'd strongly consider investing
in a rental property. That's a good way to diversify and increase
your wealth, while potentially bringing in enough revenue to cover
some of your own costs. A good rental property has helped many people
transition from employee to retiree, especially those like yourself,
who are a little ahead of the curve and might otherwise get bored.
Beyond that, you can look into the unexciting but safe options, such
as bonds, CDs and high-yield savings accounts. If you have a healthy
amount of capital and aren't ready to commit to anything that ties
those funds up, see what kind of savings rate you can get and lock
your cash up somewhere safe for a bit. As long as you aren't blowing
through cash, you might find the interest payments are pretty substantial.
For a few more ideas and details, check out my recent post at GoFarWithKovar.com
on this very subject. It sounds like you're already pretty good with
money, so stay smart and I think you'll have a very happy retirement.
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| Disclaimer:
Information presented is for educational purposes only and is not
an offer or solicitation for the sale or purchase of any specific
securities, investments, or investment strategies. Investments involve
risk and, unless otherwise stated, are not guaranteed. Be sure to
first consult with a qualified financial adviser and/or tax professional
before implementing any strategy discussed herein. To submit a question
to be answered in this column, please send it via email to Question@GoFarWithKovar.com,
or via USPS to Taylor Kovar, 415 S 1st St, Suite 300, Lufkin, TX 75901.
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